Can I use an equity loan to pay off my mortgage?

Q: My home is valued at $195,000. I owe $127,000 on the mortgage. I want a 10 year equity loan to pay off the mortgage. Can I find lenders to do this?

A: Certainly! However, you'll find that rates for fixed-rate Home Equity Loans are much high than those on first mortgages -- about 7.26% right now. A short-term first mortgage -- 15 years or less -- can be had at about 4%. Shop around; it shouldn't be too hard to find a mortgage lender to offer you a ten-year first mortgage, but if you cannot find one, consider a 15-year term, then simply make extra payments to get the ten-year term you want.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
Please enter a question.
Please enter name.
Please enter email.
Captcha code invalid
Q: What is a mortgage insurance premium? Do I need this?
APR 07, 2022
A:

In general, this will be the cost you must pay for a policy which helps to protect your lender.

Read More
Q: Will biweekly mortgage payments save me money?
MAR 23, 2022
A:

Making biweekly mortgage payments will cut your interest cost and shorten the term of your loan.

Read More
Q: Is a reverse mortgage right for you?
FEB 14, 2022
A:

If you are considering a reverse mortgage (HECM), you should be sure you understand how these loans work and how one would fit in with your overall financial plan.

Read More
Add to Homescreen?
X
X
Install this web app on your phone :tap and then Add to homescreen